Total net lending to individuals rose by 0.4 billion in April. The twelve-month growth rate was unchanged from a revised 0.8% for March. The three-month annualised growth rate was also 0.8% in April, a 0.3 percentage points decrease from March.
Within the total, net lending secured on dwellings increased by 0.5 billion, stronger than the March rise of 0.2 billion but below the previous six-month average of 1.3 billion. The twelve-month growth rate fell to 0.9%.
The three-month annualised growth rate fell to 0.8%, from 1.1% in March. The number of loan approvals for house purchase (49,871) was higher than the March figure (49,008) but below the previous six-month average (53,098).
Approvals for remortgaging (26,295) were lower than in March but in line with the previous six-month average (26,203), while approvals for other purposes (24,823) were also lower than in March and below the previous six-month average of 26,212.
Consumer credit fell by 0.1 billion in April, below the previous six‑month average and the March increase of 0.1 billion. Credit card lending increased by 0.2 billion, in line with the previous six-month average; other loans and advances fell by 0.3 billion, lower than the previous six-month average of a 0.2bn decrease.
The annual growth rate of consumer credit fell by 0.2 percentage points to -0.1% and the three-month annualised growth rate fell to 0.7%, from 1.3% in March.
David Whittaker, managing director of Mortgages For Business, said:
Between election campaigns and ash clouds, the mortgage market has had a lot to deal with over the last few months. The latest lending figures show a slight improvement but progress will be slow this year particularly with recent Korean sabre rattling yet to be thrown into the mix.
"And with the World Cup imminent and government austerity measures about to be imposed we wont see the mortgage market improve radically over the next few months. But we wont see lending fall dramatically either.
"With more lenders like Aldermore and Precise Mortgages entering the market and others like Link Loans increasing their appetite to lend competition is set to rise. Its not going to be a golden year but it could be a lot worse.
Paul Hunt said, managing director of Phoebus, said:
Its great to see mortgage lending creeping up, although the figures show the continued sluggish nature of the housing market, the number of mortgages approved for house purchases in April was only slightly higher than the 45,529 of the same month a year ago, and it was lower than the average of the past six months.
"Competition is heating up, and with the appearance of Aldermore and Precise Mortgages, and the reappearance of Link Loans, there will soon be even more options for borrowers and brokers. Thats excellent news for the market.
"On top of that, the Banks figures also show the amount saved in building societies outweighing the amount withdrawn for only the second month in the past year.
"The mutual sector needs this extra inflow of cash if its to survive this prolonged period of ultra-low interest rates. It would be a shame to see more societies go the way of the Chesham.
CML's director general Michael Coogan commented:
"Now that we have seen mortgage approvals data for the first four months of this year, it is becoming clearer that the risks associated with our lending forecast for 2010 are on the downside. We are predicting gross lending of 150 billion this year - and net lending of 15 billion - but are keeping our forecasts under review as we are tracking below these levels to date.
"So far this year, house purchase activity has been lower than in the last half of 2009, although this reflects the stamp duty holiday, which boosted activity towards the end of last year and caused the quiet start to 2010. Meanwhile, although lower interest rates are benefitting borrowers, they are removing the incentive to remortgage, which is also bearing down on the lending figures.
"The data is likely to reflect both the continuing shortage of mortgage funding and weak consumer confidence, and therefore demand. The forthcoming Budget represents an opportunity for the government to prioritise support for home-owners, although we recognise the fiscal position leaves only limited room for manoeuvre. We will update our forecasts later in the summer."
